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Shambasiv (n/a)     25 December 2007

Alteration of Articles of Association

What is the procedure for altering Articles of Association?


Learning

 5 Replies

sharmila (n/a)     25 December 2007

1. 1. Take the necessary decision by convening a Board Meeting to change all or any of the existing Articles of Association and fix up the day,time, place and agenda for a general meeting for passing special resolution to effect the change.
2. 2. See that any such change in the Articles of the company conforms to the provisions of the companies Act, 1956 and the conditions contained in the Memorandum of Association of the company.
3. 3. See that any such change does not increase the liability of any member who has become so before the alteration to contribute to the share capital of or
otherwise to pay money to, the company.
4. 4. See that any such change does not have the effect of converting a public company into a private company. If such is the case, then make an application to the Central Government for such alteration.
5. 5. See that any such change does not provide for expulsion of a member by the company.
6. 6. Issue notices for the General Meeting proposing the Special resolution and explaining inter alia, in the explanatory Statement the implication and reasons
of the changes being proposed.
7. 7. If the shares of the company are enlisted with any recognised Stock Exchange, then forward copies of all notices sent to the shareholders with respect to change in the Articles of Association to the Stock Exchange.
8. 8. Hold the General Meeting and pass the special resolution.
9. 9. File with the stock exchange with which your company is enlisted six copies of such amendments as soon as the company adopts it in General Meeting.
Out of the six copies, one copy must be a certified true copy.
10. 10. Forward promptly to the Stock Exchange with which your company is enlisted three copies of the notice and a copy of the proceedings of the General
Meeting.
11. 11. File the Special resolution with the concerned Registrar of companies with explanatory statement in Form No.23 within thirty days of its passing after
payment of the requisite filing fee in cash as per Schedule X. If the Articles of Association have been completely or substantially changed, file a new printed copy of the Articles after paying the requisite fee in cash prescribed under Schedule X to the Companies Act, 1956. payments upto Rs.50/-
12. 12. Effect the changes in all copies of the articles of association.
13. 13. Any alteration so made be as valid as if originally contained in the Articles of Association and be subject to alteration by Special Resolution as above.
14. 14. If the articles are altered pursuant to an order of the Company law Board made under section 397 or 398 then see that such alterations is not inconsistent
with the said and if it is so then obtain first leave of the Company Law Board to make such alteration.

Shambasiv (n/a)     25 December 2007

Thanks Ms.Sharmila. That is a great information.

Amey Deodhar (NA)     18 April 2010

When the alteration of articles of association becomes effectvie?

a. From the date of apssing special resolution in General Meeting

b. Registration of certified copy of the same with registrar?


(Guest)

Section 14(1) of the Companies Act, 2013 lays down that subject to the provisions of this Act and the conditions contained in its memorandum, if any, a company may, by a special resolution, alter its articles including alterations having the effect of conversion of -

(a) A Private Company into a Public Company; or

(b) A public company into a private company.

A Company may alter its Articles in accordance with the above provisions in any of the manners mentioned below:

a) By adoption of new set of articles;

b) By addition/insertion of a new Clause/s;

c) By deletion of a Clause/s ;

d) By amendment of a specific Clause/s ;

e) By substitution of a specific Clause/s .

Key Considerations:

Any change in the Articles of the company shall conform to the provisions of the Companies Act, 2013/1956, as applicable and the conditions contained in the Memorandum of Association of the company. (Section 14(1)

For effecting any change in the AOA resulting in the conversion of private company into a public company or vice-versa, company shall additionally follow the procedure prescribed for the conversion of private company into a public company or vice-versa.

By amendment, Company may insert provisions for entrenchment to the effect that specified provisions of the articles may be altered only if conditions or procedures as that are more restrictive than those applicable in the case of a special resolution, are met or complied with. (Section 5(3)

The provisions of entrenchment can be inserted only if agreed to by all the members of the company in the case of a private company and by a special resolution in the case of a public company. (Section 5(4)

The following procedure is to be followed for alteration of AOA under Section 14 of Companies Act, 2013


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